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[Klaus]

The BBC is to cut more than 1,000 jobs, mainly by slashing layers of management and squeezing back office functions such as marketing and communications.

Tony Hall, director general of the BBC, addressed staff in London on Thursday and explained that the cuts are needed to make up for a funding shortfall of £150m in 2016-17 largely due to the faster-than expected switch to online viewing.

Hall wrote: “A simpler, leaner, BBC is the right thing to do and it can also help us meet the financial challenges we face. “We’ve already significantly cut the costs of running the BBC, but in times of very tough choices we need to focus on what really matters – delivering outstanding programmes and content for all our audiences.”

Addressing staff in London, Hall said: “My central proposition is this - before we do anything else that affects our services – we have to ensure we’re running the place as efficiently, effectively and simply as possible.”

The new proposals are expected to save £50m largely by merging divisions and cutting layers of management.

Senior management roles will be cut across the board. In some places there are currently 10 layers of people and this will be cut to a maximum of seven in all areas. In a release the BBC said: “A simpler organisation will inevitably require fewer managers, especially at senior levels.”

Consultation with staff will start in earnest over the summer, with most of the jobs expected to go by the beginning of next year. The corporation currently has about 18,000 staff, so the cuts represent more than 5% of its workforce.

Saying that he will personally oversee the changes, Hall added: “I recognise this is a very tough message. I’m under no illusion that what I’ve said today will cause great anxiety across many parts of the organisation. “This is a lot of change and it will happen quite fast. But – I want all of you to know that: we’ll handle this decently – and fairly.”

The cuts come as the BBC faces tough negotiations over the renewal of its royal charter, which is due to end in 18 months’ time.

Hall, who promised a leaner and simpler BBC when he became director general two years ago, said: “We’re facing a very testing time. I haven’t chosen this path lightly or without a great deal of thought. I care greatly about this organisation and the people in it. But I genuinely believe this is the right thing to do – at the right time.”

A frozen annual licence fee of £145.50 in the last charter review and a raft of new expenses such as paying for broadband rollout has already meant a 26% decline in income, according to the BBC. The Conservative government, which is set to unveil a green paper on charter renewal in coming weeks, is thought to be considering making the BBC cover the cost of free licence fees for the over-75s, as well as decriminalising non-payment of the licence fee, which could also cost the corporation £200m.

Praising recent BBC successes in televising Glastonbury and the women’s football World Cup, Hall made a direct appeal to licence fee payers who fund the BBC on Thursday: “We must demonstrate that, even in times of very tough choices, we focus on what really matters – delivering outstanding programmes and content for all our audiences. They’re the reason we exist. We must not let them down.”

It estimates that previous savings have already cut £1.5bn a year in costs by 2017. In announcing the cuts on Thursday alongside a report from accountants PwC, Hall said the BBC’s “record on efficiency is second to none”.